Poverty Data from the Census Bureau on Children, Young People, Different Racial and Ethnic Groups, and Women

By Carolyn Burstein

October 01, 2014

The poverty rate for children under 18 declined from 21.8% in 2012 to 19.9% in 2013, the first time since 2000 that the child poverty rate declined. The number of children living in poverty also declined over the period, from 16.1 million to 14.7 million, and that is good news, indeed! Yet, before we become complacent about those figures, let’s note that children remain the age group most disproportionately poor, with nearly one in five (19.9%) living in poverty. And the poverty rate among children remained well above the 2000 level, when it was 16.2%.

As Deborah Weinstein, Executive Director of the Coalition on Human Needs (CHN) has added, “Nearly 9% of our children are living in a family at half or below the poverty line – well under $9,500 a year for a family of three. More than four in ten of all poor children are so deeply poor. Every day we allow such deep poverty to persist is a day when barriers to health and success grow harder for a child to overcome.” Imagine what this situation would be without the safety-net programs such as food stamps (SNAP), affordable housing subsidies, or jobless benefits to families in poverty!

The Center for Law and Social Policy (CLASP) reminds us that most poor and low-income children have parents who work hard, but for very little pay. Over 70% of poor children lived in families with at least one worker. While children living in single-parent families were far more likely to be poor, 5.5 million children with married parents were also poor in 2013. The very nature of low-wage employment compounds developmental risk for children whose parents have no access to paid time off and/or have unstable work schedules making securing child care a near impossibility. The stress of dealing with these kinds of circumstances can negatively impact children’s development.

Commenting on the recently-released child poverty statistics, Marian Wright Edelman, Executive Director of theChildren’s Defense Fund (CDF) said, “Child poverty is a moral blight on America. It is higher than for American adults, higher than for children in other competitor nations, and higher than the country with the world’s largest economy should ever allow.”

The Center on Budget and Policy Priorities (CBPP) has examined the causal factors behind the improvement in the child poverty rate and concluded that two major factors appear to be responsible. First, the share of families with someone working and the share with someone working full-time, year-round both rose; the latter increased from 76.3% in 2012 to 77.1% in 2013. Second, an increase in median income among families with children from $60,856 in 2012 to $62,161 (adjusted for inflation) in 2013 appears to be also responsible, although low-income families are naturally at the low end of this distribution.

It should be pointed out that while poverty declined among white, Latino and Asian children, it did not decline among African-American children. The CDF commented on this phenomenon indicating that a disproportionate number of African-American children live in families considered profoundly poor, and therefore it’s much more difficult for them to escape poverty.

Young workers, 18 to 24

Just slightly behind children in this poverty matrix are young workers, 18 to 24. Almost 20% – 19.4% – of this youth cohort had incomes below the poverty level despite relatively high education levels. While some of the explanation is due to continued high unemployment in large swaths of the country, much is also due to a lack of good quality jobs with good wages, being saddled with large student-loan debts, a lack of apprenticeships, and failing to qualify (if without children) for the Earned Income Tax Credit (EITC).

While the poverty rate of youth has improved since its peak in 2010 (22.2%), it is still higher than its pre-recession level of 17.3% in 2007. And the deep poverty rate for these young adults was higher than all age groups, with the exception of children.

Young adults (18-24) with children head almost 40% of families that are poor, even though more than 45% were working. These young workers usually have low-wage jobs, often minimum wage, and often struggle to get full-time hours. Those without a high school diploma or GED were more likely to be poor (27.4%) than those with a high school diploma (21.1%). Young workers with some college, but no degree had a poverty rate of 16.7%. CLASP tells us that by 2020, two-thirds of jobs will require a postsecondary education. Yet, in 2013, even for those enrolled in school, 17.6% were poor and 36.6% were low-income.

If one breaks down youth statistics into racial and ethnic components, the reality of the poverty rate is intensified. For example, the poverty rate among African-American young adults was 32% and among Latinos it was 21.3%. Despite these facts, whites were still the largest group of poor young adults, but African-American and Latino youth lived primarily in conditions of concentrated poverty (where 40% or more of residents live in poverty). People in these communities not only have fewer employment opportunities, but also often lack adequate public transportation to places outside their communities.

On September 13, 2014, the Washington Post ran an intriguing article in its weekly real estate section asking “Where have the first-time buyers gone?” While the article referred to all the so-called “Millennials” (those born between 1980 and 1995), it also included the youth cohort we are describing – the 18-to-24 year-olds. The lack of participation of Millennials in the housing market is apparently notorious, but, as the article clarifies, the main culprits are not difficult to identify. The “usual suspects” of low wages coupled with high levels of student loan debt inhibit realtors (and others involved in the process) from translating their desire to sell housing into a home loan for these youthful first-time buyers, given more stringent standards of underwriting than existed during the housing “boom.” Rather than a long-term shift toward renting with multiple social factors playing a role, the decline appears to be simply related to the economic circumstances cited above, especially depressed wages.

Ethnic and Racial Differences

The Census data provided both good news and bad news for different racial and ethnic groups in the U.S., but even the good news is relative. While Latino poverty dropped significantly to 23.5% in 2013 from its 25.6% in 2012, the National Council of La Raza (NCLR) notes how much higher Latino poverty is than the national rate of 14.5%. A July 2014 poll by Latino Decisions on behalf of NCLR indicates that large shares of Latino voters are anxious about losing a job, and 70% say they are not earning enough to cover basic expenses and are concerned about personal finances. NCLR maintains that the entire Latino community was harmed during the recession years by the slashing of investments in education, housing and nutrition services, programs that are vital to their wellbeing. This may account for the fact that their poverty rate has still not returned to its (still high) level of 20.6% of 2006.

The poverty rate of Latinos is more than twice that of whites. In 2013, the poverty rate for whites was 9.6%, compared with 23.5% for Latinos, 27.2% for blacks, and 10.5% for Asians. Latinos, however, were the only racial or ethnic group to experience a statistically significant change in poverty rates since 2012.

Although the employment picture improved for Latino workers, and child poverty fell rather dramatically, there were overall concerns that these numbers fell from an already high rate. While the unemployment rate of 10.2% in 2012 fell to 8.9% in 2013 among Latinos, more than 40% of these workers earned poverty-level wages. In 2013, a little over 30% of Latino children lived in poverty, compared to almost 34% in 2012, which means that Latino children appear to account for the progress made in child poverty. However, as NCLR points out, of the 14.6 million poor children overall in the U.S., 36.9% are Latinos. Others examining the same data conclude that the recovery is making a significant dent in Latino child poverty as the employment rates of Latino families rebound. It all depends on one’s perspective.

The Census data shows that the median household income increased more among Latino (+$1391) and African-American (+$793) households than white households (+$433). Between 2012 and 2013, the black-white income gap has narrowed from 58.4 cents for every dollar of white median household income to 60.4 cents for every dollar of white median household income. The Latino-white income gap has also narrowed from 68.4 to 70.3 cents on the dollar. These are very modest changes and reflect more on the deteriorating conditions of white workers than on improving conditions in minority ranks. Even the share of employed adults increased for each of these populations while the share for whites remained unchanged.

It is humbling to examine some of the long-term data supplied by the Economic Policy Institute (EPI), which analyzed old and new Census Bureau data (all of which is adjusted for inflation) to understand the real impact of inequality on the different groups. For example, the decline in African-American median household incomes from 2000 to 2013 is almost 14% and Latino median household incomes have suffered a decline of nearly 9%, while white median household incomes have experienced a decline of 5.6%. Of course, a median masks the tremendous growth experienced by the top 1%, thus pointing up again the issue and significance of income inequality.

While year-by-year advances are slow, one must acknowledge the progress that has resulted from the Civil Rights Act and other opportunities in the labor market in cutting poverty for African-Americans from 55% in 1959 to 27.2% in 2013. These gains are not trivial, but African-Americans (and Latinos, too) are still more likely to live in poor neighborhoods and places with very high unemployment rates, often for reasons related to systemic discrimination, as well as to bear the brunt of policies that have led to mass incarceration. The poverty rate of African-Americans is still very high despite considerable educational achievement. CAP has analyzed data from various sources to show that in 1965 only one-third of African-Americans had a high school diploma or any additional education, while today nearly 90% do.

Women

For women, the data are unchanged from 2012 to 2013 and, according to the National Women’s Law Center (NWLC), are grim, indeed. The decline in the U.S. poverty rate from 15% to 14.5% did not affect women since overall, one in seven live in poverty, a rate virtually unchanged since 2012. Close to 40% of women who head families live in poverty, and two-thirds of the elderly who are in poverty are women. Only Latinas saw a decline in poverty between 2012 and 2013.

The gender wage gap improved slightly from 76.5% to 78.3% in 2013, which the Census Bureau says is not statistically significant. Most women’s groups think this is hardly a meaningful improvement. The Institute for Women’s Policy Research (IWPR), along with many other organizations, claims that barring any policy or legislative changes, women will not receive equal pay until 2058.

Overall, women’s median annual earnings in 2013 were $39,157, compared with $50,033 for men. Full-time, year-round earnings for all women were 2.1% higher in 2013 than in 2012. Latina women saw the largest increase in real wages (4.8%), while Asian women saw the largest decrease in real wages (6.5%). Both white and black women increased their real earnings by .5%. Before white women’s groups get too incensed over their earnings relative to men’s, they need to examine more closely the gap between their pay and that of minority women. In 2013, African-American women earned only 78 cents for every dollar earned by white women and Latinas earned only 71 cents on the dollar.

Income Inequality

The policy ramifications of the poverty data on our nation are myriad. In this blog as well as others, the issue of “income inequality” has been mentioned more than once. But sometimes, that concept may seem abstract until some flesh is put on the bones of the argument. A report issued in early September 2014 by Standard and Poor’s (S&P) does just that.

The S&P report indicates that the wealth gap hurts state budgets. Since it is a known fact that the wealthy both shield much of their income from taxes as well as spend less of it proportionately than others do, sales tax revenue is thereby limited. Across all states, sales taxes account for more than 30% of all revenue, according to the National Conference of State Legislatures.

Before income inequality began to rise consistently, state tax revenue grew about 10% a year on average from 1950 to 1979. That average fell with each subsequent decade, dipping to about 3 ½% between 2000 and 2009. When state lawmakers are faced with the prospect of raising taxes to balance a state budget, income inequality presents a very significant set of challenges that can only be addressed at the national level. State tax code revisions don’t begin to address the consequences.

When enough of these kinds of problems occur, maybe then our congressional lawmakers will eradicate this form of economic injustice and foster a market system that is attentive to the common good. The poverty data of 2013 also clarifies another form of injustice that should be scrubbed from the American system to bring about greater economic equity – the eradication of all racism, classism, ageism and gender discrimination.